10-Q

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2024, the registrant had 77,274,527 shares of common stock, $0.0001 par value per share outstanding.

The accompanying notes are an integral part of these condensed consolidated financial statements.

(1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows:

The accompanying notes are an integral part of these condensed consolidated financial statements.

2. Summary of significant accounting policies

Basis of presentation

The accompanying condensed unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information.

In the opinion of management, the accompanying interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2023, which are included in the Company's Annual Report on Form 10-K, filed with the SEC on February 29, 2024. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other period.

Basis of consolidation

The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of the Company’s wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on December 31. References to "fiscal 2024," for example, refer to the fiscal year ended December 31, 2024.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto.

Significant estimates and assumptions made by management in these consolidated financial statements include:

•

the allowance for credit losses;

•

constrained revenue;

•

variable consideration for revenue recognition;

•

the period of benefit associated with costs capitalized to obtain revenue contracts;

•

the useful lives of intangible assets; and

•

the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions;

Table of Content

Because of the use of estimates inherent in financial reporting process actual results could differ and the differences could be material to the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

ASU 2023-07, Segment Reporting (Topic 280)

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 requires all public entities, including those public entities that have a single reportable segment to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the individual or the name of the group or committee identified as the chief operating decision maker (“CODM”). ASU 2023-07 is effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently assessing the impact this standard will have on the Company’s but does not expect it to have a material impact on the consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires all entities to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in this Update also eliminate requirements such as (1) the disclosure of the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months, (2) or making a statement that an estimate of the range cannot be made, and (3) the disclosure of the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. Lastly, the amendments in this Update replace the term ‘public entity’ as currently used in Topic 740 with the term ‘public business entity’. ASU 2023-09 is effective for the Company’s fiscal years beginning after December 15, 2024. The Company is currently assessing the impact this standard will have on the Company but does not expect it to have a material impact on the consolidated financial statements.

Other accounting standard updates effective for interim and annual periods beginning after December 31, 2023 are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Segments

The Company’s CODM is the chief executive officer. The Company’s chief executive officer reviews the financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Accordingly, the Company has determined that it operates as a single operating and reportable segment.

Revenue Recognition

Subscription solutions

Subscription solutions revenue consists primarily of platform subscription fees from all plans and recurring professional services. Subscription solutions are charged monthly, quarterly, or annually for the Company’s customers to sell their products and process transactions on the Company’s platform. Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Monthly subscription fees for enterprise plans are adjusted if a customer’s gross merchandise volume ("GMV") or orders processed are above specified plan thresholds on a trailing twelve-month basis. For most subscription solutions arrangements, excluding enterprise subscription plans, the Company has determined the Company meets the variable consideration allocation exception and, therefore, recognizes fixed monthly fees or a pro-rata portion of quarterly or annual fees and any transaction fees as revenue in the month they are earned. During the second quarter of fiscal 2023, the Company adopted a new pricing structure that provided a discount to the contractual price for customers who pay quarterly or annually. Prior to this date, enterprise subscription plans included an upfront promotional period in order to incentivize the customer to enter into a subscription arrangement. In both of these scenarios, the total subscription fee is recognized on a straight-line basis over the term of the contract. In determining the amount of revenue to be recognized, the Company determines whether collection of the entire transaction price is probable. Only amounts deemed probable are recognized as revenue. Key factors in this determination are historical contract termination rates and general economic factors.

Subscription revenue includes revenue from Feedonomics. Feedonomics provides a technology platform and related services that enables online retailers and other sellers to automate online listings of the sellers’ information across multiple third-party marketplaces and advertisers (such as Amazon, Google, Facebook, etc.). The Company provides these services under service contracts which are generally one year or less, and in many cases month-to-month. These service types may be sold stand-alone or as part of a

Table of Content

multi-service bundle (e.g. both marketplaces and advertising). Services are performed and fees are determined based on monthly usage and are billed in arrears.

Professional services, which primarily consist of education packages, launch services, solutions architecting, implementation consulting, and catalog transfer services, are generally billed and recognized as revenue when delivered.

Contracts with the Company’s retail customers are generally month-to-month, while contracts with the Company’s enterprise customers generally range from one to three years. Contracts are typically non-cancelable and do not contain refund-type provisions. Revenue is presented net of sales tax and other taxes the Company collects on behalf of governmental authorities.

Partner and services

The Company’s partner and services revenue includes revenue share, partner technology integrations, and marketing services provided to partners. Revenue share relates to fees earned by the Company’s partners from customers using the Company’s platform, where the Company has an arrangement with such partners to share such fees as they occur. Revenue share is recognized at the time the earning activity is complete, which is generally monthly and variable based on customer usage on the platform. Revenue for partner technology integrations is recorded on a straight-line basis over the life of the contract commencing when the integration has been completed. Revenue for marketing services are recognized either at the time the earning activity is complete, or ratably over the length of the contract, depending on the nature of the obligations in the contract. Payments received in advance of services being rendered are recorded as deferred revenue and recognized when the obligation is completed.

The Company also derives revenue from the sales of website themes and applications upon delivery.

The Company recognizes partner revenue share on a net basis as the Company has determined that the Company is the agent in the Company’s arrangements with third-party application providers. All other revenue is recognized on a gross basis, as the Company has determined the Company is the principal in these arrangements.

Contracts with multiple performance obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment.

The Company’s subscription contracts are generally comprised of a single performance obligation to provide access to the Company’s platform, but can include additional performance obligations. For contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”) for any distinct good or service, the Company may be required to allocate the contract’s transaction price to each performance obligation using the Company’s best estimate of SSP. Judgment is required to determine the SSP for each distinct performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate SSP is the observable prices of products or services sold or priced separately in comparable circumstances to similar customers.

Contracts with the Company’s technology solution partners may include multiple performance obligations, which can include integrations and marketing activities. In determining whether integration services are distinct from hosting services the Company considers various factors. These considerations include the level of integration, interdependency, and interrelation between the implementation and hosting services. The Company has concluded that the integration services included in contracts with hosting obligations are not distinct. As a result, the Company defers any arrangement fees for integration services and recognize such amounts over the life of the hosting obligation commencing when the integration has been completed. To determine if marketing activities are distinct, the Company considers the nature of the promise in the contract, the timing of payment, and the partner expectations. Additional consideration for some partner contracts varies based on the level of customer activity on the platform. Certain agreements contain minimum guarantees of revenue share. These contracts are evaluated to determine if the guaranteed minimum is substantive. If the minimum is deemed substantive, revenue is recognized ratably over the life of the agreement. For most of the Company’s contracts, the Company has determined the variable consideration allocation exception has been met and therefore variable fees are recognized in the period they are earned.

The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables, contract assets, and deferred revenue.

Contract Assets

Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in contract assets. Contract assets are recorded on the condensed consolidated balance sheets at the end of each reporting period in Prepaid expenses and other assets, net. Typically, contract assets arise from agreements that have tiered billings over the contract life,

Table of Content

promotional billing periods, and partner and services revenue agreements that include substantive minimums. Net contract assets were $12.7 million as of March 31, 2024 as compared to $11.9 million as of December 31, 2023.

The Company is exposed to credit losses primarily through sales of products and services to customers and partners. The Company assesses the collectability of outstanding contract assets on an ongoing basis and maintain a reserve which is included in the allowance for credit losses for contract assets deemed uncollectible. The Company analyzes the contract asset portfolio for significant risks by considering historical collection experience and forecasting future collectability to determine what will ultimately be collected from its customers and partners, delinquency level and customer type have been identified as the primary specific risk affecting the Company’s contract assets, and the estimate for losses is analyzed annually and adjusted as necessary.The Company has provisioned $1.3 million and $1.5 million for credit losses related to contract assets as of March 31, 2024 and December 31, 2023, respectively.

Deferred revenue

Deferred revenue primarily consists of amounts that have been received from customers in advance of the performance obligation being satisfied. The Company recognizes revenue from deferred revenue when the services are performed and the corresponding revenue recognition criteria are met. Amounts recognized from deferred revenue represent primarily revenue from the sale of subscription solutions, integration, and marketing services. The Company recognized $15.9 million of previously deferred revenue during the three months ended March 31, 2024.

The Company experienced an increase in the deferred revenue balance as of March 31, 2024, compared to December 31, 2023, which was primarily driven by the Company's continued shift to annual billing cycles.

Remaining performance obligation

As of March 31, 2024, the Company had $171.8 million of remaining performance obligations, which represents contracted revenue minimums that have not yet been recognized, including amounts that will be invoiced and recognized as revenue in future periods. Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors. The Company expects to recognize approximately 60 percent of the remaining performance obligations as revenue in the following 12 month period, and the remaining balance in the periods thereafter.

Remaining performance obligation consisted of the following:


(in thousands)	Current		Noncurrent		Total
As of March 31, 2024	$	105,486	$	66,350	$	171,836
As of March 31, 2023		87,172		67,872		155,044

Cost of revenue

Cost of revenue consists primarily of personnel-related costs, including: stock-based compensation expenses for customer support and professional services personnel; costs of maintaining and securing infrastructure and platform; allocation of overhead costs and credit card processing; and amortization expense associated with capitalized internal-use software.

Accounts receivable

Accounts receivable are stated at net realizable value and include both billed and unbilled receivables. Accounts receivable are net of an allowance for credit losses, are not collateralized, and do not bear interest. Payment terms range from due immediately to due within 90 days. The accounts receivable balance at March 31, 2024 and December 31, 2023 included unbilled receivables of $10.7 million, and $11.0 million, respectively.

The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for credit losses for accounts receivable deemed uncollectible. The Company analyzes grouped customers by similar risk profiles, along with the invoiced accounts receivable portfolio and unbilled accounts receivable for significant risks, historical collection activity, and an estimate of future collectability to determine the amount that the Company will ultimately collect. This estimate is analyzed annually and adjusted as necessary.

Identified risks pertaining to the Company’s invoiced accounts receivable include the delinquency level and customer type. The estimate of the amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances, historical customer delinquency, and assessment of the overall portfolio and general economic conditions.

Table of Content

The allowance for credit losses consisted of the following:


(in thousands)
Balance at December 31, 2023	$	5,997
Provision for expected credit losses		863
Write-offs charged against the allowance		(821	)
Balance at March 31, 2024	$	6,039

Stock-based compensation

The Company issues stock options, restricted stock units (“RSUs”) and performance based restricted stock units (“PSUs”) to employees.

The Company values stock options using the Black-Scholes option-pricing model at the date of grant and recognizes the relates stock-based compensation expense on a straight-line basis over the service period, net of estimated forfeitures, which is typically four years.

The Company values RSUs at the closing market price on the date of grate. RSUs typically vest in equal installments over a four-year period, subject to continued service, and compensation expense is recognized straight-line over the requisite service period.

The Company grants PSUs which provide for shares of common stock to be earned based on the Company's total stockholder return compared to the Russell 2000 index, and referred to as market-based awards. The Company values these market-based awards on the grant date using the Monte Carlo simulation model. The determination of fair value is affected by the Company's stock price and a number of assumptions including the expected volatility and the risk-free interest rate. The Company assumes no dividend yield and recognizes stock-based compensation expense ratably from grant date over the performance period of the award. The market-based awards will cliff-vest at the end of the three-year period ranging from 0 percent to 200 percent of the target number of PSUs granted.

The Company also grants PSUs which provide for shares of common stock to be earned based on its attainment of the Company's adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") and revenue relative to a target specified in the applicable agreement, and are referred to as Company performance-based awards. The Company values these awards at the closing market price on the date of grant. The vesting of Company performance-based awards is conditioned upon the achievement of certain targets and will vest in three annual tranches in a percentage of the target number of shares between 0% to 200%. The Company recognizes stock based compensation expense over the performance period, if it is probable that the performance condition will be achieved. Adjustments to stock based compensation expense are made, as needed, each reporting period based on changes in our estimate of the number of units that are probable of vesting.

3. Revenue recognition and deferred costs

Revenue recognition

The Company’s source of revenue consists of subscription solutions fees and partner and services fees. These services allow customers to access the Company’s hosted software over the contract period. The customer is not allowed to take possession of the software or transfer the software. The Company’s revenue arrangements do not contain general rights of refund in the event of cancellations.

Disaggregation of revenue

The following table disaggregates revenue by major source:


	Three months ended March 31,
(in thousands)	2024		2023
Subscription solutions	$	60,959	$	53,808
Partner and services		19,401		17,949
Revenue	$	80,360	$	71,757

Revenue by geographic region was as follows:

Table of Content


	Three months ended March 31,
(in thousands)	2024		2023
Revenue:
Americas – U.S.	$	61,138	$	54,809
Americas – other (1)		3,776		3,351
EMEA		9,192		7,983
APAC		6,254		5,614
Revenue	$	80,360	$	71,757

(1)Americas-other revenue includes revenue from North and South America, other than the U.S.

Revenue by geographical region is determined based on the region of the Company’s contracting entity, which may be different than the region of the customer. Revenue attributed to the United States was 76 percent and EMEA was 11 percent during the three months ended March 31, 2024 and 2023. No single country, other than the United States, represented more than ten percent of total revenue during the three months ended March 31, 2024 and 2023.

Deferred commissions

Certain sales commissions earned by the Company’s go-to-market teams are considered incremental and recoverable costs of obtaining a contract with a customer. The Company amortizes deferred sales commissions ratably over the average customer life which is three years. The Company includes amortization of deferred commissions in sales and marketing expense in the condensed consolidated statements of operations. The Company periodically reviews the carrying amount of deferred commissions to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred costs. The Company did not recognize an impairment of deferred commissions during the three months ended March 31, 2024 and the year ended December 31, 2023.

Sales commissions of $2.1 million and $1.7 million were deferred for the three months ended March 31, 2024 and 2023, respectively; deferred commission amortization expense was $2.3 million and $1.6 million for the three months ended March 31, 2024 and 2023, respectively.

4. Fair value measurements

Financial instruments carried at fair value include cash and cash equivalents, restricted cash and marketable securities.

For assets and liabilities measured at fair value, fair value is the price to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact, and assumptions that market participants would use when pricing asset or liabilities.

The accounting standard for fair value establishes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last unobservable. The standard requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value are as follows:

•

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

•

Level 2 – Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

•

Level 3 – Inputs are unobservable that are significant to the fair value of the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s data.

The following table presents information about the Company’s cash equivalents, marketable securities and liabilities that were measured at fair value as of March 31, 2024 and December 31, 2023:

Table of Content


	As of March 31, 2024
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Cash equivalents (1):
Money market mutual funds & cash equivalents	$	33,727	$	0	$	0	$	33,727
Marketable securities:
Corporate bonds	0			75,318	0			75,318
U.S. treasury securities		56,251	0		0			56,251
Commercial paper	0			28,004	0			28,004
Agency bonds	0			44,708	0			44,708
Total marketable securities	$	56,251	$	148,030	$	0	$	204,281
Liabilities:
Convertible senior notes due 2026	$	0	$	288,938	$	0	$	288,938


	As of December 31, 2023
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Cash equivalents (1):
Money market mutual funds & cash equivalents	$	39,754	$	0	$	0	$	39,754
Marketable securities:
Corporate bonds		0		64,545		0		64,545
U.S. treasury securities		48,138		0		0		48,138
Commercial paper		0		30,596		0		30,596
Agency bonds		0		55,136		0		55,136
Total marketable securities	$	48,138	$	150,277	$	0	$	198,415
Liabilities:
Convertible senior notes due 2026	$	0	$	280,658	$	0	$	280,658

(1) Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets, in addition to $28.3 million, and $33.1 million of cash, as of March 31, 2024 and December 31, 2023, respectively.

The contractual maturities of the investments classified as marketable securities were as follows:


(in thousands)	As of March 31, 2024		As of December 31, 2023
Due within 1 year	$	165,733	$	183,132
Due in 1 year through 2 years		38,548		15,283
Total marketable securities	$	204,281	$	198,415

Table of Content

The following tables summarize the gains, losses, and estimated fair value of cash equivalents, marketable securities and liabilities as of March 31, 2024 and December 31, 2023:


	As of March 31, 2024
(in thousands)	Amortized Cost/ Principal amount		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Cash equivalents:
Money market mutual funds & cash equivalents	$	33,727	$	0	$	0		$	33,727
Marketable securities:
Corporate bonds		75,294		50		(26	)		75,318
U.S. treasury securities		56,312		9		(70	)		56,251
Commercial paper		28,005		5		(6	)		28,004
Agency bonds		44,767		3		(62	)		44,708
Total marketable securities	$	204,378	$	67	$	(164	)	$	204,281
Liabilities:
Convertible senior notes due 2026	$	345,000	$	0	$	0		$	288,938


	As of December 31, 2023
(in thousands)	Amortized Cost/ Principal amount		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Cash equivalents:
Money market mutual funds & cash equivalents	$	39,754	$	0	$	0		$	39,754
Marketable securities:
Corporate bonds		64,421		157		(33	)		64,545
U.S. treasury securities		48,061		86		(9	)		48,138
Commercial paper		30,588		16		(8	)		30,596
Agency bonds		55,182		24		(70	)		55,136
Total marketable securities	$	198,252	$	283	$	(120	)	$	198,415
Liabilities:
Convertible senior notes due 2026	$	345,000	$	0	$	0		$	280,658

5. Business combinations

Acquisition of Makeswift

In October 2023, the Company acquired all issued and outstanding stock of Makeswift, Inc. (“Makeswift”) pursuant to a merger agreement. Makeswift is a leading visual editor for Next.js websites. The total purchase consideration for Makeswift was approximately $9.2 million which consisted of the following:


(in thousands)	Amount
Base purchase price	$	11,000
plus: Closing cash		238
minus: Deferred compensation		(2,000	)
Total purchase consideration(1)	$	9,238

(1) Of the total purchase consideration, $1.1 million of cash was held back by the Company for potential breaches of representation and warranties, as well as adjustments to working capital. Subsequent to March 31, 2024, the Company dispersed working capital hold back of $0.1 million.

Table of Content

The table below summarizes the estimated fair value of the assets acquired and liabilities assumed in the Makeswift acquisition, at acquisition date:


(in thousands)	October 31, 2023
Tangible assets acquired	$	1,370
Right-of-use asset		147
Intangible assets acquired		7,890
Liabilities assumed		(1,311	)
Deferred tax liability		(1,045	)
Lease liability		(150	)
Net assets acquired, excluding goodwill	$	6,901
Total purchase consideration	$	9,238
Goodwill	$	2,337

As of March 31, 2024, the purchase price allocation is not finalized as the Company has not yet filed the Makeswift tax return for the period ended October 31, 2023. Once this return is filed in fiscal 2024, the Company will update the estimated fair value liabilities assumed in the acquisition.

The fair value of identifiable intangible assets acquired at the date of the acquisitions is as follows:


(in thousands)	Fair value		Useful life (in years)
Developed technology	$	6,600		5.0
Customer relationships		1,200		3.0
Tradename		90		5.0
Total acquisition-related intangible assets	$	7,890

The $2.3 million goodwill balance is primarily attributable to synergies and expanded market opportunities that are expected to be achieved from the integration of Makeswift with the Company’s offerings and assembled workforce. The goodwill balance is not deductible for income taxes purposes.

As part of the Makeswift merger agreement, $2.0 million of the purchase consideration is subject to clawback if any of the key Makeswift employees voluntarily terminate their employment within 18 months after the closing date of the transaction. The $2.0 million is accounted for as compensation expense and therefore not included in the purchase consideration. The related compensation is recognized as post-combination expense over the 18 month service period on a straight-line basis. The Company incurred $0.3 million of compensation costs during the three months ended March 31, 2024. The Company has $1.3 million of unvested amounts of cash retention payments recorded in prepaid expenses and other current assets and other assets on the condensed consolidated balance sheet as of March 31, 2024.


Delaware	46-2707656
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11305 Four Points Drive Building II, Suite 100 Austin, Texas	78726
(Address of principal executive offices)	(Zip Code)


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	2
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	37
	Signatures	38


	March 31,			December 31,
	2024			2023
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	60,900		$	71,719
Restricted cash		1,112			1,126
Marketable securities		204,281			198,415
Accounts receivable, net		39,302			37,713
Prepaid expenses and other assets, net		29,251			24,733
Deferred commissions		8,695			8,280
Total current assets		343,541			341,986
Property and equipment, net		9,991			10,233
Operating lease, right-of-use-assets		4,024			4,405
Prepaid expenses, net of current portion		1,817			1,240
Deferred commissions, net of current portion		6,430			7,056
Intangible assets, net		24,584			27,052
Goodwill		52,086			52,086
Total assets	$	442,473		$	444,058
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	7,063		$	7,982
Accrued liabilities		3,212			2,652
Deferred revenue		34,810			32,242
Current portion of debt		553			547
Current portion of operating lease liabilities		2,477			2,542
Other current liabilities		19,830			24,785
Total current liabilities		67,945			70,750
Long-term portion of debt		339,970			339,614
Operating lease liabilities, net of current portion		7,014			7,610
Other long-term liabilities, net of current portion		625			551
Total liabilities		415,554			418,525
Stockholders’ equity
Common stock		7			7
Additional paid-in capital		628,058			620,021
Accumulated other comprehensive gain (loss)		(96	)		163
Accumulated deficit		(601,050	)		(594,658	)
Total stockholders’ equity		26,919			25,533
Total liabilities and stockholders’ equity	$	442,473		$	444,058


	For the three months ended March 31,
	2024			2023
Revenue	$	80,360		$	71,757
Cost of revenue (1)		18,439			17,446
Gross profit		61,921			54,311
Operating expenses: (1)
Sales and marketing		32,432			34,052
Research and development		19,988			20,845
General and administrative		14,929			16,494
Acquisition related expenses		333			4,125
Restructuring charges	0				420
Amortization of intangible assets		2,467			2,033
Total operating expenses		70,149			77,969
Loss from operations		(8,228	)		(23,658	)
Interest income		3,178			2,426
Interest expense		(720	)		(722	)
Other income (expense)		(332	)		31
Loss before provision for income taxes		(6,102	)		(21,923	)
Provision for income taxes		(290	)		(197	)
Net loss	$	(6,392	)	$	(22,120	)
Basic net loss per share	$	(0.08	)	$	(0.30	)
Shares used to compute basic net loss per share		76,626			74,142


	For the three months ended March 31,
	2024		2023
Cost of revenue	$	656	$	1,189
Sales and marketing		1,867		2,867
Research and development		3,476		3,503
General and administrative		2,592		3,079


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three months ended March 31, 2024
	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Equity
Balance at December 31, 2023		76,410	$	7	$	620,021		$	(594,658	)	$	163		$	25,533
Proceeds from exercise of stock options		308		0		974			0			0			974
Release of restricted stock units		507		0		(1,325	)		0			0			(1,325	)
Stock-based compensation		0		0		8,388			0			0			8,388
Total other comprehensive loss		0		0		0			0			(259	)		(259	)
Net loss		0		0		0			(6,392	)		0			(6,392	)
Balance at March 31, 2024		77,225	$	7	$	628,058		$	(601,050	)	$	(96	)	$	26,919


	Three months ended March 31, 2023
	Common Stock				Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Equity

Balance at December 31, 2022		73,945	$	7	$	576,851		$	(529,987	)	$	(1,199	)	$	45,672
Proceeds from exercise of stock options		246		0		(316	)		0			0			(316	)
Release of restricted stock units		396		0		0			0			0			0
Stock-based compensation		0		0		10,487			0			0			10,487
Total other comprehensive loss		0		0		0			0			717			717
Net loss		0		0		0			(22,120	)		0			(22,120	)
Balance at March 31, 2023		74,587	$	7	$	587,022		$	(552,107	)	$	(482	)	$	34,440